In a formal response to the federal government, Abita Springs has agreed with several findings in a recent audit of some of its FEMA-financed Hurricane Katrina recovery projects, but disagreed that the town should be on the hook for repaying more than $3.5 million for work auditors said was improperly contracted.

The Times-PicayuneHurricane Katrina damage in Abita Springs.

The response to last year's audit, compiled by the town and the Louisiana Governor's Office of Homeland Security and Emergency Preparedness and submitted last month, is now under review by FEMA's New Orleans office.

The FEMA review is one of several steps in the lengthy process. FEMA will send its findings to the Office of Inspector General by July 11. If FEMA says Abita Springs must repay the money, the town can appeal.

Abita officials have said the amount auditors say the town should have to repay is more than its annual budget of roughly $3 million. But the point man for the state, Ben Plaia Jr., lead counsel for GOHSEP's Disaster Recovery Division, thinks the town has a solid case.

Plaia said he met with Fitzmorris to help formulate the town's response and that Fitzmorris worried that having to repay the money would wreck the town's finances. "I said, 'Don't worry about it, Mr. Mayor, they're not going to get a penny,''' Plaia said.

Auditors for the federal Office of Inspector General last year probed 19 hurricane recovery projects for which the town received or was promised $4.78 million in FEMA financing.

Auditors questioned $3.52 million that was spent on three contracts for debris removal and monitoring, as well as culvert replacement, saying the town did not follow proper federal contracting guidelines. Although the audit notes that the town did not overpay for the work, auditors said the town should repay the money since it did not follow federal guidelines.

The largest of those contracts was the $2.83 million the town spent for debris removal. To save time and money, Fitzmorris said the town piggybacked onto a debris removal contract the parish had with Omni Pinnacle. Auditors said the town should instead should have put the work out for competitive bids.

The other two were a $546,024 contract with Kyle Associates, an engineering firm with an existing contract with the town, for monitoring debris removal, and a $147,610 contract with McMath Construction for culvert removal and replacement. Auditors said the town did not perform a cost or price analysis for the monitoring contract, and didn't include a cost ceiling in the contract. In the culvert contract, they cited the town for not competitively bidding a $139,830 change order to the contract or performing a cost or price analysis.

Fitzmorris has said the work was all conducted in the chaos of Katrina's aftermath, at a time when clearing the debris and getting the town back up and running was paramount. He said it has all been approved already by FEMA.

In their response to the auditors, the town and GOHSEP point out that the audit even notes that FEMA has determined that the town's debris removal and monitoring costs were reasonable.

Plaia said that's important.

While the auditors focus on non-bending contracting guidelines, FEMA tends to focus more tightly on whether the costs were reasonable and if the work was actually done, Plaia said.

"Everybody has these problems,'' Plaia said, adding that his office is involved in a similar audits for governments and other entities across south Louisiana. "But for the most part they're fixable.''

Auditors also said the FEMA should "deobligate'' $429,503 that exceeded the eligible financing amounts the town claimed. In its response, the town and GOHSEP agreed that $423,106 should be deobligated. They said they didn't know how auditors arrived at their $429,503 figure.

Much of the $429,503 is or projects that FEMA approved for financing, but for various reasons never made it off the drawing board or for which less money was spent, Plaia said. "We've always known there's some money we've got to pay back,'' Fitzmorris added.

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Bob Warren can be reached at bwarren@timespicayune.com or 985.898.4832.